The energy crisis that turned Muller from an almost unknown technocrat to a celebrity received a lot of attention.
When Klaus Muller began his job as head of the FNA, the governing body for the electricity, gas, telecommunications, postal and railway networks across Germany, he imagined he would be dedicated to the expansion of renewable energy sources as well as fiber optic cable systems.
His previous job was in the field of environment and agriculture in Schleswig-Holstein, so he was quite close to Economy Minister Robert Habeck. The two are members of the Green Party, and Muller is very interested in Green priorities such as the trend towards carbon neutrality – although that is something that makes Mr. Habeck unhappy.
But Muller had to admit to The Economist that these priorities will have to wait. He took office just days after Russia began a special military operation in Ukraine. On the very first day, he had to spend most of his time thinking about the supply and distribution of gas – the “lifeline” of German industry threatened by Western countermeasures from Russia.
“We had a much better summer than everyone expected, but that’s not all,” he said.
What happened in Ukraine also turned Muller from an almost unknown technocrat to a celebrity receiving a lot of attention. He is a frequent guest on TV talk shows and has tens of thousands of followers on Twitter. FNA’s daily newsletter on the gas supply situation has millions of readers.
When Muller made his optimistic comments, it seemed that the whole of Germany “breathed”. On the other hand, when he makes cautious comments, such as the warning on Twitter on November 28 that in the next 7 days the temperature in Germany will be 2 degrees Celsius lower than the average for the last 4 years, it seems that as pessimism also pervades the country.
The reason that the German people, especially those in the industrial sector, pay attention to Muller’s every word is because he is in charge of securing gas supplies. If the German government takes the unprecedented step of declaring a gas emergency, all 75 FNA employees are ready to split shifts 24/7.
They were stationed in a windowless room of an office building built in the 1960s to coordinate gas supplies. The room is equipped with about 20 beds, has its own generator, a water tank, a bathroom and even frozen food.
Hospitals, schools, kindergartens, the military, police stations, fire departments, prisons, households and essential businesses will be prioritized, Muller explained. The places that consume the most energy, such as warm-water swimming pools and saunas, will be among the first to be cut.
The decision to cut gas supply will be made based on six criteria, including the size of the company, the items it produces (food and medicine will be exempted) and how long it will take so that the company can reduce consumption without damaging the equipment. FNA has developed a digital platform to manage the supply of 2,500 companies that use the most gas.
Even with such careful planning and management, a gas emergency can still cause severe disruption to supply chains, even leading to bankruptcy and unemployment. Last September, there was a very bleak forecast made by the IFO Institute in Munich. They estimate German GDP could shrink by 7.9% next year if a state of emergency is declared. That is a greater damage than when the German economy falls into a recession because of the global financial crisis or Covid-19.
But perhaps this winter Germany will avoid this nightmare. Gas storage facilities are overflowing with gas imported from Russia before Russian President Putin “turned off the valve” in September (Russia used to provide 55% of the total gas that Germany imports). Currently Germany’s main supply comes from Norway, then the Netherlands, Belgium and France. By Christmas, Germany will have three more floating liquefied gas stations at Wilhelmshaven, Lubmin and Brunsbüttel. These 3 facilities were rushed to build in record time. By next winter, it is expected that there will be 3 or 4 more stations.
Still, Muller pointed out, that’s still not enough to cover the entire supply from Russia. Germany still needs to use at least 20% less gas than in previous years to avoid a gas shortage. This becomes increasingly difficult as the weather gets colder and colder. “Please use sparingly even in the cold!” Muller wrote on Twitter on November 28.
So far the Germans are still following his advice. Research by the University of Hertie published on November 1 showed that in September the amount of gas used by German industry was 19% lower than last year. Households and small businesses also save about 26%. According to a survey by the IFO Institute, about 75% of manufacturers have been able to save gas without sacrificing productivity. But they also said that if the situation persists, production cuts are inevitable.
In any case, the current energy crisis has left Germany with three lessons, says Muller: “First, we would never put ourselves at the same risk by being so dependent on a single supply.” This lesson has also been reflected in the debate currently raging in Germany about close economic ties with China.
The other two lessons – reducing dependence on fossil fuels and investing more in renewable energy – will make Germany stronger in the long run. And those are the things that allow Muller to think about the Green Party priorities that he hoped to pursue when he took over as head of the FNA.